2025 SUMMARY OF THINGS TO KNOW
TOP 7 BENEFITS FOR INDIVIDUALS
(OBBBA highlights, eligibility and phaseouts apply)
1) ✅ “No Tax on Tips” relief (big deal for qualified service workers)
What it does: New relief for certain reported tips, reducing or eliminating income tax on eligible tips up to $25,000 per tax return (subject to phaseouts).
Important notes:
• Only applies under defined conditions (employer type, reporting rules, caps), not all tipped workers and/or tips qualify
• Max benefit is the same regardless of filing status, except Married Filing Separately is excluded
2) ✅ Overtime pay deduction
What it does: Certain workers can claim a new deduction on qualifying overtime pay, lowering taxable income from those extra hours.
Key limits:
• Applies on overtime wages up to $12,500 per person (subject to phaseouts)
Important notes:
• Only under defined conditions (employer type, reporting rules, caps), not all workers qualify, ask your employer
• Married Filing Separately is excluded
3) ✅ SALT cap and itemized deduction tweaks (HUGE for CA tax filers who itemize)
What it does: The SALT (state and local tax) deduction cap is temporarily raised from $10,000 to $40,000 (inflation-adjusted after 2025).
Why it matters:
• Major benefit for high-tax-state residents who itemize
Timeline:
• Scheduled to tighten again, returning to $10,000 in 2030
Charitable giving updates:
• The 60% of AGI limit is made permanent
• A small floor (around 0.5% of AGI) for deducting contributions begins in 2026
4) ✅ No Tax on Car Loan Interest (on your personal return)
What it does: Allows qualifying taxpayers to deduct up to $10,000/year of interest on certain new-car loans for 2025–2028, even if you take the standard deduction.
Important notes:
• Multiple requirements apply (example: final assembly in the U.S., secured auto loan, originated after 12/31/2024, etc.)
• RVs and off-road vehicles do not qualify
5) ✅ Expanded Child Tax Credit
What it does: The credit is increased (around $2,200 per qualifying child starting 2025, inflation-adjusted after).
Refundability update:
• Up to $1,700 per child may be refundable (for many qualifying families)
Important notes:
• Income phaseouts still apply, higher-income households may see little or no added benefit
6) ✅ Higher standard deduction stays
What it does: The standard deduction remains elevated long term, so fewer people will itemize.
For 2025 (filed in 2026):
• Single or Married Filing Separately: $15,750
• Head of Household: $23,625
• Married Filing Jointly or Qualifying Surviving Spouse: $31,500
7) ✅ Seniors’ additional deduction (age 65+)
What it does: Taxpayers age 65+ get a new additional deduction of about $6,000 per eligible person, subject to phaseouts, for a limited window (mid-2020s), on top of the regular standard deduction.
Important notes:
• Bigger benefit for modest-income seniors
• Married Filing Separately is excluded
TOP 3 BENEFITS FOR BUSINESSES AND REAL ESTATE
(Planning matters, eligibility rules apply)
1) ✅ 100% bonus depreciation made permanent
What it does: Restores full 100% bonus depreciation and makes it permanent for qualifying new and used business property (instead of phasing down after 2022).
Effective: Property placed in service in tax years beginning after 12/31/2024 (typically 1/1/2025 for calendar-year businesses)
2) ✅ Bigger, permanent Section 179 expensing
What it does: Permanently increases Section 179 expensing limits.
New limits:
• Max deduction increases to about $2.5 million
• Phaseout threshold increases to about $4 million (indexed going forward)
Effective: Tax years beginning after 12/31/2024
3) ✅ Pass-through 20% QBI deduction strengthened
What it does: The 20% QBI deduction is made permanent and income thresholds for limits on high earners and specified-service trades are raised, allowing more owners to qualify.
Effective: Key expansions generally apply for tax years beginning after 12/31/2025 (typically 2026 for calendar-year businesses)